India, New Zealand to Finalize FTA in 60 Days

New Delhi: After a gap of about ten years, India is hopeful that it would ink a free-trade agreement or FTA in next two months with New Zealand in order to boost economic ties in both the countries. Before signing the FTA deal, India is likely to mainly focus on the some duty concessions on agriculture products like apple, kiwi, dairy, and wine for the government. Besides, India is also expecting to facilitate the mobility of professionals and skilled workers between the two countries, while at the same time addressing the issue of irregular migration.

Hinting about the historical deal, New Zealand Prime Minister Christopher Luxon, who is India on a 4-day visit from March 16, on Tuesday has said that he is looking forward to signing a free trade agreement with India in two months, a move which is expected to increase bilateral trade by 10 times over a decade. “Let’s drive this relationship forward, and I look forward to Prime Minister Modi signing that agreement in 60 days time,” Luxon said, while addressing the India-New Zealand Economic Summit organised by industry body FICCI here.

Luxon’s inclination comes a day after Prime Minister Narendra Modi said that the proposed deal will increase the potential for bilateral trade, investment and mutual cooperation which will encourage the sectors like dairy, food processing and pharmaceuticals. However, experts believe that there would be some tricky points in the discussion, which may focus on duty relief on agri products like apple, kiwi, dairy, and wine among others.

India's key goods exports to New Zealand include clothing, fabrics, and home textiles; medicines and medical supplies; refined petrol; agricultural equipment and machinery such as tractors and irrigation tools; auto; iron and steel; paper products; electronics; shrimps; diamonds; and basmati rice. The main imports are agricultural goods, minerals, apples, kiwifruit, meat products such as lamb, mutton, milk albumin, lactose syrup, coking coal, logs and sawn timber, wool, and scrap metals.

With the proposed deal, commerce minister Piyush Goyal, however, is expecting ten times growth in next ten years. “I can tell you that together, there’s every possibility of achieving that 10x growth in the next 10 years, if we work in the spirit of complementary economies. There is hardly anything on which we compete with each other, and those few areas of sensitivity we can very easily navigate or respect each other given the different levels of development and different levels of prosperity that each country has today,” Goyal said.

As per official data, the bilateral trade between the two countries stood at $873.4 million (exports $538.33 million and imports $335 million) in 2023-24 as against $1.02 billion in 2022-23. On dairy being a sticking point between the two nations, New Zealand trade minister Todd McClay, however, said, “I think there are many opportunities between us to grow trade. One of the most important things we're going to do is respect our negotiators.”